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Jan 22, 2014, 11.01 PM IST | Source: Moneycontrol.com

India versus China: The inevitable comparison

There has been no end to the debate around which of the two economies out-performs the other, and China seems to have emerged as the default favourite for a number of reasons.

Anuj Puri

Chairman & Country Head, JLL India

Expertise : Property

More about the Expert...

Anuj Puri
Jones Lang LaSalle India
 

The first day of the World Economic Forum is vibrant and instructive. 'The China Context' session gave much food for thought, especially since India is invariably compared to China in terms of the global business they attract. In fact, India and China have seemingly always been up for comparison in the past. There has been no end to the debate around which of the two economies out-performs the other, and China seems to have emerged as the default favourite for a number of reasons.

I have to admit that China’s government has a strong reputation for thinking on its feet and leveraging global business opportunities. There is much to be said for a single, unopposed government that switches sails quickly and decisively in the face of global economic headwinds. China’s focus on world-class infrastructure is also nothing short of admirable – and here, again, India would have to concede a certain shortfall.

Also read: Worst over for economy; '14 growth at 5.5%: Moody's 

However, the basic differences between India and China should not be ignored. One is comparing apples with oranges when it comes to government structure and economic policy-making. In any case, it looks like India may emerge as a stronger long-term player than China. This has become increasingly evident after the global economic downturn, which China addressed with exuberant stimulus packages and India tackled with far more circumspect fiscal policies. This circumspection is evident even today, and it is still turning out to be the more sustainable stance.

By 2030, India will have 800 million workers, with more than 590 people located in cities and per-capita income that is expected to increase 200 percent over the next two decades. India also has the world’s largest pool of educated, English-speaking workers, and attracts jobs from service-oriented companies seeking talented knowledge workers. This includes the IT, ITeS, education and banking industries. Wages for those jobs are low by Western standards, but allow a much better standard of living than the labour-intensive jobs that typically go to China.

Greater disposable income, plus a political structure that protects businesses and workers from unfair government intervention, help to raise India’s level of ‘domestic consumption.’ This makes India attractive to global companies as a market for their products and services, whereas China is seen mainly as source of cheap labor for exports. If Chinese workers raise their level of domestic consumption, they will eventually not be the world’s cheapest labor pool anymore. Global companies will then move some of their manufacturing operations to other countries. 

India’s political system is more suited for long-term equity investments, while China holds more attraction for mid-term investors. Naturally, this also reflects on the country’s real estate market via a more robust long-term health prognosis. However, interestingly we have seen two types of corporate occupiers heading to each of these two countries. The services, knowledge talent seeking companies are heading for India – demonstrated through growth in IT and ITES, banking etc. whilst the large scale manufacturing and skill based corporates are expanding their base in China.

In my opinion, India’s scale of development stands a strong chance of outstripping that of China for a couple of fundamental reasons. The first is that most of the land in China is unrelentingly government-owned, which puts a default ceiling on overall availability. This is not the case in India. Moreover, India relies more on IT, which requires less land and infrastructure than manufacturing – which just happens to be China’s forte. Also, Indian Grade A commercial space developers are a pretty wealthy and seasoned lot, with many of them holding substantial land banks.

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Mumbai
Capital Values Rate/Sq ft (INR)
Aajiwali
3000 - 5000
Ambernath
3000 - 5000
Badlapur
1000 - 3000
Bhandup (West)
11000 - 13000
Chembur (East)
15000 - 17000
Chembur (West)
11000 - 14000
Dombivali (East)
4000 - 6000
Ghatkopar
13000 - 15000
Heeranandani Gardens Estate - Powai
25000 - 30000
Hiranandani Gardens Estate - Powai
25000 - 30000
Kalyan (East)
2000 - 4000
Kalyan( West)
3000 - 5000
Karjat
1000 - 3000
Khandala
8000 - 10000
Kharegaon
5000 - 7000
King Circle
17000 - 28000
LBS Marg
12000 - 15000
Lonavala
3000 - 5000
Mulund (East)
11000 - 14000
Mulund (West)
11000 - 14000
Mumbai Nasik Highway
3000 - 6000
Powai
15000 - 17000
Senapati Bhagath Singh Road
3000 - 5000
Sion (East)
18000 - 21000
Sion (West)
17000 - 22000
Tilak Nagar
12000 - 22000
Ulhasnagar
3000 - 5000
Vikhroli
11000 - 14000
4 Bunglows
17000 - 28000
7 Bunglows
13000 - 23000
Chandivali
10000 - 15000
Malad (East)
12000 - 14000
Versova
21000 - 24000
Airoli
4000 - 8000
Belapur
6000 - 9000
Ghansoli
6000 - 8000
Kalamboli
4000 - 9000
Kamothe
4000 - 6000
Nerul
7000 - 10000
Palm Beach Road
12000 - 15000
Panvel
3000 - 6000
Sanpada
8000 - 10000
Sea Woods
8000 - 10000
Ulwe
3000 - 6000
Uran
3000 - 6000
Vashi
9000 - 12000
Altamount Road
62000 - 72000
Breach Candy
62000 - 74000
Chowpathy
48000 - 58000
Colaba
42000 - 46000
Cuffe Parade
67000 - 69000
Dadar(East)
32000 - 34000
Dadar(West)
29000 - 32000
Lower Parel
32000 - 34000
Mahalaxmi
38000 - 40000
Malabar Hills
68000 - 75000
Mumbai Central
23000 - 34000
Napean Sea Road
66000 - 74000
Parel
26000 - 34000
Prabhadevi
37000 - 39000
Tardeo
41000 - 49000
Worli
36000 - 41000
Andheri (West)
18000 - 20000
Andheri(East)
15000 - 17000
Bevarly Park
5000 - 7000
Bhayander (East)
5000 - 6000
Bhayander (West)
3000 - 5000
Boisar
1000 - 3000
Borivali (East)
11000 - 13000
Borivali (West)
10000 - 14000
Dahisar
4000 - 8000
Goregaon (East)
13000 - 17000
Goregaon (West)
12000 - 14000
Kandivali (East)
12000 - 14000
Kandiwali (West)
11000 - 12000
Malad(West)
9000 - 14000
Mira Road
5000 - 7000
Naigaon
1000 - 4000
Nala Sopara (Eastt)
3000 - 5000
Nalasopara (West)
3000 - 5000
Poonam Nagar
6000 - 8000
Shanti Nagar
7000 - 9000
Shrishti
6000 - 9000
Vasai Road
1200 - 4000
Virar
1000 - 3000
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